A 23-minute watch.  

Stuart Alexander is CEO of Gemini Investment Management, and in our latest OctoBlast, sits down with Lee Robertson to chat about the role of the ACD and where governance could improve to elevate fund manager oversight to the high regulatory standards ordinarily applied to UK financial markets.

Alexander addresses the broader Woodford issue: “The role of the Authorised Corporate Director (ACD) is to protect investors and ensure the fund is being run as written in the prospectus, and as expressed to investors – in this instance, that hasn’t been done”.

Positively, Alexander thinks there’s much more transparency than there was in the 80s/90s, with plenty of information now available within the KIID or prospectus; he also thinks outsourcing the role is best practice as duties were “far more conflicted in-house”.

So where could ACDs improve?

The clue is in the ‘D’ – they should direct. To do this he thinks much greater board independence is required, and that within the ACD a “separation between the financials and the ACD’s obligations” is essential to avoid potential conflicts of interest.

He admits applying this oversight can be tricky with such well known names, and that dealing with fund managers who tend to be strong characters can be “a little bit like dealing with children”, but that to keep funds operating as mandated, it’s really the job of the regulator, the independent NEDs, and the ACD to put “rails along the road” and keep the fund manager on track.

For more of this week’s Octo multimedia content, we’ve had AJ Bell’s Ryan Hughes podcasting on why investors should stop tinkering with their portfolios, Charlie Parker on how he helps advisers achieve consistent client outcomes, and Simon Clare speaking at Next Wealth Live on the democratisation of investments.